The issue: Power costs
Our view: A unit cost for domestic users should ideally be lower than it was in 2016 when the national generation capacity stood at just 862 megawatts..
As Uganda seeks to generate adequate electricity, the unit cost of power for domestic users is still high. Although the electricity distributor, Umeme, is investing in improving the network, its efforts are often hampered by power theft which eats into their revenue.
A March 2019 report titled: “Electricity Access in sub-Saharan Africa Uptake, Reliability and Complementary Factors for Economic Impact,” says power theft contributes to unstable power supply. In the last few weeks, several Ugandans have been arrested over power theft and illegal connections.
Uganda’s installed electricity generation capacity was 1,179MW, following the completion of several hydropower generation projects including Isimba Hydropower Dam.
At the moment, commercial users as well as medium, large and extra-large industrial users pay lower tariffs than domestic users. While a domestic consumer pays Shs752.5 for a unit of electricity, a large industrial consumer on average pays Shs363 for each unit of electricity consumed. But a unit cost for domestic users should ideally be lower than it was in 2016 when the national generation capacity stood at just 862 megawatts.
Power theft has an adverse impact on the power utility’s operations, as it deprives them of raising the much-needed revenue that could be used to improve the network to guarantee stable and increased power supply.
Although Mr Selestino Babungi, the managing director of Umeme, which distributes about 97 per cent of all electricity used in the country, recently boasted of serving Ugandans cheaper than regional counterparts, the unit cost of power for an ordinary Ugandan is still high if compared to the per capita income of the regional countries.
It is, therefore, meaningless to an ordinary Ugandan for government to boast of an increased generation capacity if the unit cost of electricity eats into a substantial amount of their income.
This perhaps, partly explains why Kampala has the highest number of households using grid electricity for lighting (86 per cent) while Karamoja has the least (only one per cent). Annually, Umeme loses an estimated Shs100 billion in illegal power connections and vandalism.
This is partly why, during his 2018/2019 budget speech, Finance Minister Matia Kasaija said government will enforce actions against vandalism and illegal connections in the energy sector.
Kasaija also committed to […]
